As Flight Delays Mount, Travel-Related Retail Tries to Make it Better

In a deal touted to unleash a “flurry of innovation” the world’s largest operator of travel-related retail stores is combining with the top airport and rest stop food and beverage company to create a $13 billion colossus with 5,500 locations in 75 countries.

In announcing the tie-up of Swiss-based Dufry — which owns Hudson, World Duty Free and a half dozen other brands — with Italy’s Autogrill, whose portfolio of over 300 global and local restaurant names fill food courts and airports around the world, the two companies said the enlarged group would redefine the industry and enrich the passenger journey through experience and innovation.

“By executing on this unique opportunity, we will accelerate growth by fully focusing on consumers and the digital revolution,” Dufry CEO Xavier Rossinyol said in the press statement, noting the additional value to landlords and airport partners the expanded service portfolio would bring, as well as a pending new corporate identity that reflects it.

“With a culture of prioritizing serving customers while relentlessly driving operational efficiencies and actively managing our portfolio of concessions, we will be able to drive growth and innovation as well as profitability,” Rossinyol said of the growing travel retail empire that is projected to serve 2.3 billion passengers at 1,200 airports and other locations. 

Airport Time, Travel Are Up

The news comes at a time of unprecedented flight delays and elongated pre-boarding and check-in procedures that have travelers spending more time in airports than ever — whether they planned to or not. At the same time, the airlines industry itself is also experiencing a resurgence of demand following two years of COVID-related cutbacks and canceled plans.  

Although no specifics were given, the companies said the creation of an integrated global player that caters exclusively to enhancing the travel experience would not only be transformational but offered a complementary strategic fit between the two firms.

At the same time, the combination of Dufry and Autogrill is projected to deliver compelling cost synergies, including the optimization of reduced costs related to F&B and convenience items in the U.S., followed by improved efficiencies in support functions and other reduced business operating expenses.  

“Synergies are planned to be fully realized in the first two years post-transaction,” the company statement read. “The combination brings together two groups of highly experienced and strongly engaged professionals with complementary skill sets.”

Mobile Customers, Mobile Commerce

To be sure, the commercialization of airports and roadside rest areas has grown and changed over the years, as more locations offer a multi-branded approach that offers a mix of retail categories that range from premium coffee and diverse cuisine to more apparel, electronics and personal care products aimed at customers on the move. 

While Dufry and Autogrill certainly have unique exposure to this retailing niche, this trend of enhanced convenience, selection and speed has also caught the eye of other retail innovators, including Amazon, which is already partnering with Hudson to test its Just Walk Out touchless payment technology.

“We’ve equipped more than a dozen U.S. and UK third-party locations with Just Walk Out technology, Amazon One, or a combination of both,” Amazon Vice President of Physical Retail and Technology Dilip Kumar said in a blog post last month in which he outlined the future expansion, use cases and reduced costs of new contactless systems.  

“Sports venues, like Climate Pledge Arena and TD Garden, and travel retailers, like Hudson and WHSmith, have enabled their stores with our technologies to make the shopping experience more enjoyable and efficient for their shoppers,” Kumar added, while pledging push the boundaries of AI to help tackle the complex challenges in the physical retail world.

While no one wants to spend any longer in hanging around airports than necessity, Dufry and Autogrill are determined to make the experience as pleasant as possible.

“A new cycle opens that will allow us to unleash a whole array of options centered around the needs of travelers worldwide,” Gianmario Tondato da Ruos, CEO Autogrill said. “The business combination will enable a flurry of innovations in its offerings, which will translate into more enjoyable travel experiences across various geographies and channels,” he added.